Mastercard has debuted a service that will allow customers to buy and sell digital assets via their bank accounts.
Digital payment service giant, Mastercard, is launching a program that will allow mainstream banks to offer cryptocurrency trading to their customers. According to reports by CNBC, Mastercard’s new venture will see them act as a middleman between banks and the cryptocurrency trading platform Paxos Trust Co. This new arrangement is similar to the one that allows users to trade cryptocurrencies through PayPal, who also use Paxos to facilitate trades. Mastercard has said that it will act as a “bridge” between Paxos and banks and will handle regulatory compliance and security – which are two of the main reasons for banks’ reluctance to cryptocurrencies.
Mastercard has called its product “Crypto Source” and has said that it will kick off by offering it in the U.S., Israel, and Brazil early next year as a pilot program according to Mastercard’s President of Cyber and Intelligence, Ajay Bhalla.
Banks have thus far been rather hesitant about cryptocurrencies but have been warming up to them citing regulatory concerns as reasons not to offer them to their retail clients. This new service offered by Mastercard however may help cryptocurrencies gain more mainstream adoption. Bhalla added that being able to buy crypto “from your own bank where you have your bank account is a very big need from the market and something consumers want.”
The newest offering by Mastercard will be facilitated via a partnership with Paxos which will provide virtual currency trading and custody services on behalf of the banks, meaning that lenders will not hold assets on their balance sheets. Most are still rather apprehensive about digital assets with about 60% of people reporting that they would rather test the market through traditional financial institutions such as banks. Mastercard’s chief digital officer, Jorn Lambert, said of the news:
There are a lot of consumers out there that are really interested in this, and intrigued by crypto, but would feel a lot more confident if those services were offered by their financial institutions. Adding that “ It’s a little scary to some people still.”
Crypto Source does not mark Mastercard’s first foray into cryptocurrencies. The firm announced in August that it had entered into a partnership with Binance to offer a prepaid crypto card in Argentina to “bridge the gap between cryptocurrencies and everyday purchases.”
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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